Finance Committee on May 19th, 2022

[Benjamin Dachis]

This is a perennial problem in any kind of government service, where you're asking yourself, “What does this bureaucrat do in terms of taking an idea and turning it into output?” but that's true of everyone. How do you measure this in the health sector, for example? It's very difficult to measure outcomes in government services, and rightly so in some cases.

Where I would go in terms of value for money is in the budget process—for example, there are ways of asking yourself when you have a clear fiscal anchor of a return to balanced budget in, say, a few years. Rather than a much more high-level question of an anchor that's based on debt to GDP, which depends on multiple factors, including the economy, when you have a balanced budget requirement in a few years, you have a very clear set of metrics that say, “This spending is not going to fit within our set criteria.” If we have that kind of outlook of when we're trying to return to a balanced budget, it will help government really focus its mind on what kind of spending makes the most sense.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Muys. That's the time.

We're moving to the Liberals.

We have MP Chatel for five minutes, please.

[Sophie Chatel, Liberal, Pontiac, QC]

Thank you very much, Mr. Chair.

I thank all the witnesses for being with us today, especially the witness from the Federation of Canadian Municipalities.

I represent a riding of 41 municipalities and I hear great things about the services your organization provides. Bravo!

Earlier, you raised the issue of rurality. I would like you to tell us about the particular issues you see yourself with housing in small municipalities.

What my colleagues and I hear about rural Canada is that it is increasingly difficult to buy land in rural areas. There are also very few highly organized developers. So it's a difficult situation.

Can you tell us how the programs that we have now and that were announced in the budget could be well suited to the rural environment?

[Daniel Rubinstein]

Thank you for your question.

We support applying a rigorous rural lens to how programs are designed and implemented, for all the reasons you mentioned. For sure, in the housing accelerator fund, the budget talks about ensuring that smaller and fast-growing rural communities can access that. I was at the HUMA committee last week on the program. I made the suggestion that it would be possible to have a carve-out for rural and smaller communities within that program, so that they're not applying in the same bucket as larger communities. We've seen that work in other models.

I mentioned the disaster mitigation and adaptation fund ahead of the budget. In our pre-budget submissions, we talked about the need for water and waste-water infrastructure, particularly for smaller communities, and for broadband as well. That of course has received a lot of attention and remains a real focus.

On housing, what I can share is that we know the housing crisis is felt everywhere now. Our board, which represents large cities, medium-sized, rural, northern...everyone is seized with this. On something like homelessness and the Reaching Home program, we've talked before about the need for a larger carve-out for rural communities within that program and hope that's how it's implemented going forward. We appreciate all the efforts across departments to apply that rural lens. It's something that we work quite closely on with Minister Hutchings, Infrastructure Canada and other departments across Canada to get right.

[Sophie Chatel, Liberal, Pontiac, QC]

In the absence of a tailor-made agreement for small or rural municipalities, how can programs be better adapted to rural areas?

What we're hearing is that the major programs of Canada Mortgage and Housing Corporation are very cumbersome to administer for small organizations trying to create affordable housing. The Rapid Housing Initiative, or RHI, is much more accessible for rural areas.

Do you think this initiative is worthwhile?

Is this a good way to help small municipalities?

[Daniel Rubinstein]

I think our members see the rapid housing initiative as being a best practice in how to deliver funding. The biggest challenge with RHI is not having enough access to funding, so we appreciate another round in the budget.

As it relates to other NSH programs, I mentioned in my remarks the national housing co-investment fund. This is the primary delivery mechanism for social and affordable housing. We took great pains ahead of the budget to say, as you launch the accelerator fund, at the same time let's speed up the approvals and increase the amount that's available for contribution—so, higher grants—to make the economics work a bit better and move dollars faster within the co-investment fund and in the rental construction program. The budget signals that. That's really important work, and we want to see it happen fast and in a way that's sensitive to communities of all sizes.

I appreciate the question.

[Sophie Chatel, Liberal, Pontiac, QC]

We will obviously be following this closely.

Do I have any speaking time left, Mr. Chair?

[The Chair, Liberal, Peter Fonseca]

You have 30 seconds.

[Sophie Chatel, Liberal, Pontiac, QC]

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Ms. Chatel.

Now we'll hear from the Bloc and MP Ste-Marie for two and a half minutes, please.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair.

My questions are again for Mr. Chartrand and Mr. Mueller.

Gentlemen, I ask each of you to answer them in one minute or less, if possible.

On the subject of the aircraft that are going to be exported, we have been told by the Department of Finance that the design of the tax means that tax is still collected on exported aircraft. The Department will try to find something, but, according to them, it is not urgent, because it will only be put in place on January 1. So it seems that they don't want to make any changes in the short term.

With regard to the threshold for business use, which is set at 90%, it appears that there is no willingness on the part of the department or the government to change anything.

What message would you like to convey to the department and the government on these matters?

[David Chartrand]

The message I would like to send to them is clear: all the time we waste before acting on this does not reduce the concerns.

As you know, companies have already cancelled orders for business aircraft. In addition, some orders are currently on hold.

The longer we wait, the more likely potential customers will shop elsewhere. This will have an impact on our supply chain, on the manufacturing sector and on jobs in Canada. That's what I wanted to tell you.

I will leave the rest of the time to Mr. Mueller.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

You have the floor, Mr. Mueller.

[Mike Mueller]

Thank you for your question.

Again, as I said before, the industry needs predictably and certainty. While we were encouraged by the minister's comment, we haven't seen anything concrete, so we're really looking toward some concrete measures on this. As I said, the legislation is flawed. The economic impact is quite severe. Especially for an industry that lost 30,000 jobs through the pandemic, to now put them through this just doesn't make a lot of sense at all.

You're absolutely right. There's the threshold piece, which I talked about—the 90%—and the unfair burden on the manufacturers, absolutely. Then also the export tax piece and huge considerations on cash flow as things move back and forth.

There is a lot of concern. We need to see some changes. Ultimately my recommendation would be to remove the aircraft piece from this. It's not doing what the government wants it to do.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

I wish to thank both witnesses.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Ste-Marie.

Now to the NDP and MP Blaikie for two and a half minutes, please.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Mr. Tobin, currently we have a lot of employers who are saying they can't find people to work. We have a lot of people who say they want to work and they can't find the right job. Obviously, at the very least, there is a bit of a mismatch going on.

I think we missed an opportunity when people were coming off pandemic benefits to try to train people into positions that were available. We continue to miss opportunities, I think, through the employment insurance system, to try to connect individual workers who are looking for the right job with employers who have real positions available and training people into jobs.

Then, beyond that, there are questions of public investment. If we're talking about climate change, whether it's in construction, manufacturing or other sectors, it's developing a work forecast so that employers can train people with confidence and onboard them for the work not just that they have right now but that they'll be planning to do.

I wonder if you could speak a little bit to how government might try to have a policy approach that is more particular than just asking people to train for an industry in which they hope to find a job, instead of trying to connect them directly with employers who could have a job waiting for them at the end of training.

[Steven Tobin]

Thank you.

The point of the question is that, on the one hand, many employers are saying they can't find people or can't find people with the right skills, but then we know and understand that many Canadians are having difficulty finding a job. I think this is happening for at least three or four different reasons.

In some cases, there really aren't any people who are available. In other cases, there's a mismatch of what I would say are expectations. We saw a considerable change in expectations, notably in the hospitality and accommodation industry during the pandemic. We also have a mismatch of skills, so in some instances employers are looking for something that might not exist in the market. Then, of course, we have geographic barriers. In some instances, the availability of labour is not in a place where the demand for labour is.

In my mind, what the government can and should be doing, first and foremost, is playing that convener role. It's understanding what exactly employers are looking for and the types of talent and skills that are needed in order for businesses and investments to thrive.

Then, of course, it's addressing it through appropriate training and education policies, so working with colleges, universities and other training providers to make sure that the right skills training is being provided that's going to be demanded in the market today and tomorrow.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Tobin and MP Blaikie.

Now we're going to the Conservatives and MP Chambers for five minutes, please.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much, Mr. Chair.

It's a great conversation today with all of our witnesses. I appreciate all of the perspectives.

I'll go back to Mr. Dachis, on process with respect to some of the competition changes we've seen in the bill.

Some stakeholders mentioned that they didn't feel they were consulted. There was, of course, the consultation done by Senator Wetston, but all of a sudden we found some language and proposed changes in the budget bill with little consultation on the drafting. Is that a fair perception?

[Benjamin Dachis]

Absolutely.

The problems with the BIA are reminiscent of a very similar process concern that accompanied the legislative changes to the Competition Act the last time we did this, in 2009, which was again via the budget process.

For example, some of the things we're seeing now in terms of changes on wage-fixing are unintended consequences from some of the rushed 2009 amendments. Some of these proposed amendments in the BIA reflect fixes to that process, and they're an overcorrection. What we're going to see very soon after this is the need for legislative changes again in the future. More importantly, because we didn't consult on some really key things, which I can get into more detail on, about problems on the wage-fixing provision, the government is not going to achieve its fundamental goal of improving the operation of the Competition Act.

[Adam Chambers, Conservative, Simcoe North, ON]

Just at a high level, might you perhaps talk about one or two of those challenges that you foresee in the future?

[Benjamin Dachis]

For sure.

Let's talk about wage-fixing. There are very sound legal and economic reasons to forbid wage-fixing and no-poach agreements. Price-fixing, which has a criminal penalty with it, and wage-fixing, are very economically similar, but the language of the new amendment is overly broad and creates a lot of uncertainty.

For example, there is great uncertainty about whether the term “employee” captures all categories of workers. There is no definition of “employer” and “employee” in the Competition Act, so have they consulted with employment lawyers about the enactment of this? This is something that all parties that concern themselves about the state of employees should be really concerned about. That this is going to have an uncertain application, with the other end being going to jail for over 10 years, is a pretty serious concern.

[Adam Chambers, Conservative, Simcoe North, ON]

We are where we are right now.

If you could say what you would be comfortable with, could you leave a recommendation for this committee and for members of Parliament to consider?

[Benjamin Dachis]

I would leave you with a suggestion for one of two paths for the committee.

One is carving division 15 out of the legislation. I recognize that, in a budget bill, those kinds of asks are pretty big. However, we've heard a number of people talk about that need for other provisions.

The other approach is delaying the proclamation of these provisions going into force until a later date, such as a year from now. With the way the wage-fixing provisions are written in the legislation, they do not come into force until a year after the legislation is passed. That could easily be expanded to the other provisions of these amendments.

That has a number of benefits. It's going to allow for consultation, proper consultation, proper public debate, about what these provisions are going to do. It also creates a very good set timeline for what the government committed to doing in terms of a second round of consultation. Give the competition law and other stakeholders a year or so to really dig into these amendments. Frankly, this is the only forum—this and tomorrow at the industry committee are pretty much the only forums—that we're having to debate these bills. That is not enough time, so more time, such as through delayed proclamation, can really help.